A Guide to Small Business Franchises

There are hundreds, even thousands of franchises that you may consider while you start planning your new business. Franchises, like any other kind of business, come in all sizes. There are franchises which cost several hundred pounds as well as franchises which cost well over a hundred thousand pounds. The ones which are most readily recognised by customers nationwide and around the world will have the largest franchise fees and require the highest levels of investment (although it is still possible to have a small local store in a franchise chain).

Some franchises cost more than they have any reason to and you should perform a lot of research going into the franchise buying process to make sure that whatever franchise you end up with has the resources, experience and support infrastructure that you need. On the other hand, you may find that a small business franchise is a better fit for you in terms of cost and suitability to the area where you live; let’s take a look at the characteristics of the small franchise business and see why you may find a smaller franchise to be more suited to your needs.

The primary reason that a lot of people decide to go with a smaller franchise is, as you would expect, the cost. With a small business franchise you can pay less than a thousand pounds on your franchise fee, and the total cost of setting up everything that you need for the business may actually be less than ten thousand pounds if you are very conservative with your costs and do everything that you can to cut corners and save every penny. There are lots of ways that you can do this – many small business franchises are capable of being run out of your own home. This might fall under the name of a home business, except that you have the support of a company which helps you to get a good price on supplies and which teaches you everything that you need to know in order to create a consistent product.

While a large business franchise may require you to spend a lot of money on setting up a storefront which conforms to their specifications, the small business franchise often allows you to escape from these costs – you may not even need to have a storefront at all! If you are running a delivery business then in some cases you can make your business delivery only and you might be able to use your own vehicles for delivery. Avoiding paying for a new vehicle can help you to save money, as can being able to write off your existing vehicle on your taxes as a business expense! It is this kind of creative thinking that helps many small businesses to get on their feet – the fewer expenses that you have, the less danger there is that your business will fail right away, and the more likely you are to have something which is stable not only past the critical first year but for the year after that and the year after that.

The biggest down side that there is for running a small business franchise instead of a large business franchise is that you have less of a brand – the amount of marketing that you will have to do on your own is greater because customers are less aware of your product and the company name. If you are running a business which is small enough that you do not even have a storefront, then you will have to bring in all of your customers through advertising and word of mouth, so advertising / marketing will represent a much larger part of your ongoing costs than it does for a lot of other businesses.

There’s another possible down side, but it depends more on the specific type of business that you are thinking of setting up. For some kinds of businesses you may find that the amount of strategic and informational support that you receive from the franchise company is critical. If the business that you are running is one which you are unfamiliar with, then you may find it prudent to rely to a large degree on the advice of the parent company. In fact, in most cases even if you have experience running a certain kind of business it will still be best to take the advice the parent franchise company in the vast majority of situations – the research done by the company will be better because they are large and have set up stores in many locations.

With a small business franchise, the advice that you get may not be of the highest calibre – the franchise company that you choose, if you go for the small franchise business, might not even be more than a few years old! By going with a franchise which is as of yet somewhat unproven, you reduce the odds that the parent company will be able to help you in all of the difficult situations which may occur. The stability of the franchise company may also be in question – if you pay your franchise fee of a few hundred pounds to a small company which you discover at a franchise fair and then the company shuts down you may be stuck with a location and no existing name to help sell it – in such a case there is really not that much difference between owning a franchise business and just starting up your own business enterprise from scratch.

What kind of small business franchises are there? For some kinds of businesses such as restaurants, you may not want to go with a small business franchise as there are serious logistical issues which you have to work out in order to make such a business run efficiently. For a good restaurant or chain store you want to have a company which can get you discounts and work with you to get the best rates on everything that you need from local retailers / advertisers and the like.

For other kinds of businesses which are based on things that you can do relatively easily – constructing basic products that you can make by hand or with a simple machine and then selling them over the internet and mail-order as well as via delivery and in other people’s stores is something which you may be able to find easy success doing as a small franchise business. If the franchise business is based on a good product which is seeing current success and all that you need to create the product is the right kind of supply paired with some simple know-how, then a small business franchise may be more than enough for you to make a big profit.

Keeping it simple is one of the primary advantages of the small business franchise, and by paring down the number of variables which contribute or take away from your success you can get the best chance of having a franchise which is stable. In particular, the first time business owner may find that a small business franchise with a simple operating strategy and low start up costs is the best way to make a quick profit and to enter the world of business with a strong showing.

Whether you are running a large business franchise or a small business franchise, some factors still apply to whether or not you find success – remember that you need to choose a business franchise which suits the area where you will be doing business – not just whatever kind of business you may personally be interested in operating (if you want to run a kind of business which is unsuited for your area then you would be better advised to change areas first). You can get the best results from a business which fills a void – a need which no other business in the area is satisfying. Do this and you will be successful even with something which is simple and small in scale.

When your costs are small and you make things as simple as possible you have the potential to make larger profits than when things are complicated and costly. At the same time, the large business franchise offers advantages which the small business franchise cannot in terms of advice and material backup as well as advertising / marketing, etc. Your personal tastes and the needs of the local market will determine whether or not a small business franchise is the best choice, but if you have the ability to go with a small business franchise and make the kind of money which you need, then you should definitely take advantage of what small business franchises have to offer. Put the same level of research and careful consideration into your selection of a small business franchise as you do for a large business franchise and if you have been diligent enough you will be able to reap the rewards which come to those who exercise good planning skills.

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